Asia

The US-China competition is getting intense with each passing day, with China having fast-emerged as a systemic rival to both the US and other members of NATO (North Atlantic Treaty Organization). This is evident from NATO’s 2022 Strategic Concept approved at NATO’s Summit in Madrid on 29 June. Although, according to some reports, the US and the UK hold much stronger views on China compared to Germany, France and the EU, the strategic concept itself has taken a giant qualitative leap forward in comparison to its previous avatar launched in 2010, which did not even mention China as a cause of concern for NATO and its allies. In its 2022 strategic concept, NATO notes that as a “systemic challenge”, China has been exploiting politico-military, economic and diplomatic tools for its pow...

The prolonged Ukraine – Russia conflict is hurting the very fundamentals of poorcountries, especially countries like Pakistan. An analysts in JP Morgan Chase &Co. warned recently that global oil prices could reach a ‘stratospheric’ levels if theUS and European penalties prompt Russia to inflict retaliatory crude-output cuts.A daily cut of 3 million-barrel in supplies would push benchmark London crudeprices to USD 190, while the worst-case scenario of 5 million could mean USD380 a barrel, said the analyst. This would push Islamabad to a scenario muchworse than the current crisis that Colombo is facing. Islamabad is currentlyexperiencing worst energy crisis even when the oil prices are hovering above USD100 a barrel. The crisis deepened further with the State-owned Pakistan LNG Ltdscrap...

The disruption in supply chain and sky rocketing energy prices due to Ukraine-Russia conflict along with rising debt service to China are accentuating the problems of Nigerian economy, which is struggling for recovery after falling into recession in 2019 and 2020. Despite Nigerian economy showing signs of recovery in the first quarter of 2022 with 3.6% growth in GDP due to a broad based recovery in the services and agriculture sector among others, its lead sector, i.e., oil is still depressed. Nigeria is heavily dependent on crude oil exports for the bulk of government revenues and foreign exchange reserves. However, the nascent economic recovery of Nigeria is facing several challenges that could disrupt the stability and growth of the country. According to World Bank’s Economic Outloo...

Turkey’s lira, which has suffered two currency crises since 2018, fell for thesixth-straight day in July, the longest losing streak since mid-May. The lira wastrading down 0.3 percent at 17.28 per dollar in Istanbul on July 07, 2022. Thecurrency has lost almost a quarter of its value this year after sliding by 44 percentin 2021.Market is rife with concerns that the TL will lose more value due to thequestioning of the adequacy of the Central Bank of the Republic of Turkey (CBRT)reserves.CBRT weekly data is keenly watched by the analyst. Bankers calculate adecrease in foreign exchange deposits of around $3.5 billion, most of which iscorporate-related. Due to the activity experienced in euro/dollar and gold/dollarparities in June 22 end, the data will also be followed in an adjusted way. Fur...

ISLAMABAD: At a review meeting of the National Coordination Committee on foreign-funded projects, the ministry reported that it was managing an ongoing portfolio of $34.8bn such projects of various sectors of the economy. “Out of the total portfolio, $15bn (43pc) is considered as problematic,” it added. On top of that, the meeting was informed that the “share of federal energy projects is about $3.3bn, of which $2.3bn (or almost 70pc) is rated as problematic”, an official statement said. No wonder then, the energy sector is emerging as a challenge to the country’s stability, an official said, referring to over 17pc losses and 10pc short recoveries in the power sector and 10-17pc system losses in the gas sector. Minister for Economic Affairs Sardar Ayaz Sadiq presided over the ...

The economic crisis in Turkey is worsening every passing day as inflation issurging at an alarming rate and manufacturing output going down while itscurrency spiraling down fast. This has led to huge inconvenience to people,thanks to food shortage, low wages, and high farming costs. So people areprotesting against the incumbent Turkish President Recep Erdogan. Thisdoes not come as good news to Erdogan, who is seeking anotherpresidential term in soon-to-be-held elections. Besides the inflation andfood shortage, the rising number of Covid-19 patients is another factor thathas angered people. The rising hardships are adding to the socio-politicaltensions, which are likely to be detrimental to Erdogan's prospects ofreelection.The annual inflation in Turkey hit 79 per cent in June this year, w...

Even as the Pak economy is faced with daunting challenges, the budget for FY2022-23 is neither innovative nor bold enough to address the structural issueswhich are proving a hurdle to economic revival of the country. The economy whichhas been continuously facing twin deficit (fiscal deficit and current account deficit)in the recent past while inflation is getting out of control with an imminent threat oflooming default. The authorities should have endeavoured to take up boldstructural reforms, but the budget disappointed.It came as a shock to both international and domestic observers as well theInternational Monetary Fund (IMF) that Finance Minister Miftah Ismail’s USD 47billion federal budget for the ensuing fiscal year has done little to address thefundamental problems facing the econom...

Washington: The scrutiny of Chinese banks pertains to individual characteristics such as concentration, rapid asset growth, the importance of shadow banking, the opaque interconnectedness of financial firms, and Chinese banks’ increased international clout. Recent reports indicate that Credit Suisse Group is slowing its expansion in China. Credit Suisse has postponed the launch of its locally incorporated bank until 2024, allowing it to expand its wealth management bank. Among the COVID-19 lockdowns and increased regulation, the firm’s management cited China’s slowing economy. Credit Suisse is also awaiting an on-site inspection from regulators before it can expand on the mainland, said Sherman. Because well-known local and entrenched banks control the majority of the market shar...

Gilgit Baltistan, PoK: Pakistan has a lot of loan on its head from China. To pay the load and settle the debt, Pakistan might give Gilgit-Baltistan regions, a Pakistan Occupied part to China on lease in order to pay the debt.  Chairman of Karakoram National Movement, Mumtaz Nagri also expressed fear that the isolated and neglected, Gilgit Baltistan could become a future battleground for the world powers to compete, reported Al Arabiya Post. The northern-most part of Kashmir borders China and Nagri expressed fear that Pakistan may cede GB to China. Nagri is arousing people and has asked them “not to be scared of ISI and be prepared to go to jail,” Pakistani media reports have said. Pakistan ceding GB that it illegally occupies would be a boon for China’s South Asian expansion...

There was a wave of optimism and sigh of relief when Pak authorities got an assurance from the International Monetary Fund (IMF) about restoration and extension of the Extended Fund Facility (EFF), which was scuttled due to Islamabad’s failure to meet conditionality of the bailout package. But now it is becoming increasingly difficult, amid double digit inflation, to eliminate fuel subsidies, stop tax exemption and levy new taxes, and meet the IMF conditionality. The recent suggestion from the IMF to Pak government in the Doha talks (May 18-25) to renegotiate the China-Pakistan Economic Corridor (CPEC) before making a payment worth USD 149 million to the Chinese power plants due to allegations of suspected overcharging, adds another dilemma for Islamabad and its tethering economy.   ...